German liners Hapag-Lloyd, Hamburg Süd discuss merger

Tuesday, December 18, 2012

The leading German container shipping companies Hapag-Lloyd and Hamburg Süd said this morning that they are discussing a possible merger.
If accomplished, the combined companies would be the fourth largest container shipping company in the world with more than 1 million TEUs in capacity.
The only larger liner companies would be Maersk, Mediterranean Shipping Co., and CMA CGM.
The two companies issued terse, identical press releases that read “The Executive Boards of Hapag-Lloyd AG and of Hamburg Südamerikanische Dampfschifffahrts-Gesellschaft KG (Hamburg Süd), in agreement with their shareholders, are investigating if, and under what conditions, a merger of both companies would be of interest.”
According to the information service Alphaliner’s list of the Top 100 container shipping companies, Hapag-Lloyd is the sixth largest container shipping company with 162 owned and chartered ships with an aggregate 634,086 TEUs of capacity, or about 3.8 percent of the world's fleet. Hamburg Süd is the 12th largest shipping company with 102 ships of 416,859 TEUs capacity, or 2.5 percent of the global fleet.
There has long been speculation about a possible combination of the two companies, in part because Hapag-Lloyd has a strong presence in the major East-West trades, while Hamburg-Süd is strong in the North-South trades.
In addition, a combination of the two companies would not face the cultural issues that a combination of European and Asian liner companies might.
Simplifying a possible merger is the fact that the two shipping companies have relatively few shareholders. The Albert Ballin consortium owns 77.96 percent of Hapag Lloyd. That consortium consists of the City of Hamburg, Kühne Maritime, Signal Iduna, HSH Nordbank, M.M. Warburg Bank and HanseMerkur. Another 22.04 percent is owned by the tourism company TUI AG.
Hamburg-Sud is owned by the Oetker Group, a family company that has interests in the food, beverage, and banking industries.
Alphaliner said Hapag-Lloyd owns 62 ships with 324,259 TEUs of capacity and charters 78 with 309,827 TEUs of capacity. In addition, it has seven ships with a collective 92,183 TEUs of capacity on order, while Hamburg-Sud's fleet consists of 43 owned ships with 214,283 TEUs capacity and 59 ships on charter with 202,576 TEUs of capacity, as well as 26 ships on order with a collective capacity of 167,040 TEUs.

Sources: BlueWater Reporting. (Click to view full data set.)

Here is a chart from BlueWater Reporting showing estimated weekly allocated capacity based on vessel capacity each carrier deploys in the various trade routes. Note that some intra-regional services are not included. - Chris Dupin